LRB Workbook page 27 #4

[Stephanie Oswalt]

We have received the following question from a student:

Hey in your LR work book on page 27 question 4. The question read 25% increase on January 1 and 20 decrease then, and asked if the price was higher, lower, or the same during after the sale and December first. The answer key says that the the price was the same, but subtracting 25-20 still has a 5% increase since the implementation of this so I was just trying to see how can it be the same.

An instructor will respond below. Thank you!

[Dave Killoran]

Hi,

Thanks for the question! there's no error here. what's occurred is that you are looking at straight percentage differences (25-20) and coming up with a 5% difference, but those percentages apply to an underlying set of numbers that actually do net out to be zero. For example:

• Let's say the price of the Cheetah on January 1 is $100. If we raise that price by 25%, it goes up to $125. In February, when we drop the price by 20%, that means we drop the price of $125 by 20%, which is down 25 to, you guessed it, $100.
  
  So, the raise occurs on a smaller number and the drop occurs on a larger number, and this nets out to no change.

Please let me know if that helps. Thanks!